San Miguel again faces fine for disclosure breach

MANILA, Philippines - The Philippine Stock Exchange (PSE) has again threatened to penalize San Miguel Corp. for allegedly violating disclosure rules, this time for failing to promptly announce a deal with Japan-based Kiring Holdings Co. In a letter to San Miguel Chief Finance Officer Ferdinand K. Constantino, the bourse noted that the food and beverage giant had disclosed that Kirin was buying a minor stake in beer unit San Miguel Brewery, Inc. for P58.93 billion only after the exchange had sought clarification on an online article published on Friday morning. It was only later that afternoon that San Miguel came out with a press release confirming the acquisition, the exchange pointed out. "Based on the records, the information was released to the media with prior or simultaneous disclosure to the exchange. It was only when the exchange requested for clarification of the news article that the corporation disclosed it," the PSE said. This, it added, violated Sec. 4.1 and Sec. 4.2 of disclosure rules, which require companies to break the news once they become aware of "any material information or corporate act or development within 10 minutes." The rules also bar a listed firm from divulging information to anyone unless it is ready to simultaneously disclose it to the bourse. San Miguel had yet to answer the PSE letter. This was the third time that the PSE had hit San Miguel Corp. for failing to immediately disclose its transactions to the exchange. Last month, it was ordered to explain its failure to inform the exchange about a deal with the Ashmore group that gave the conglomerate an exclusive right to buy the shares of SEA Refinery Holdings B.V. in Petron Corp. The bourse had also asked San Miguel why it should not be punished for failing to promptly disclose that it had signed a deal in October to buy the government’s 27% interest in Manila Electric Co. for P27 billion. In both instances, San Miguel has managed to elude the fine after telling the bourse that its inability to announce the events had been beyond its control. Meanwhile, the PSE also asked San Miguel Brewery why it had not promptly disclosed how it had used the proceeds of its capital-raising activity last year. Based on its listing prospectus, San Miguel Brewery had allocated P148 million for the improvement of its operations, and spent another P35.9 million for general and administrative purposes. This, the exchange said on Friday, deviated from its initial allocation of P107 million for operations and P22.7 million for general and administrative purposes. In answer, the beer unit said what had been presented in its prospectus was the company’s best estimate of the use of net proceeds based on its current plans and anticipated expenditures. "The actual allocation of net proceeds may vary as management may find it necessary or advisable for the continuity of its operations, safety of personnel and property, and compliance with government regulations," San Miguel Brewery said. - BusinessWorld